MS link irks Ticketmaster

Microsoft (MSFT) has been slapped with a lawsuit by Ticketmaster (TKTM) that claims the software giant is engaging in "electronic piracy" by placing links to Ticketmaster's Web site on its Seattle Sidewalk guide.

Ticketmaster's lawsuit, filed in U.S. District Court in Los Angeles yesterday, contends that Microsoft's new Seattle Sidewalk Web site illegally uses the Ticketmaster name and trademark, mainly by providing links to Ticketmaster's own site.

The lawsuit seeks a court order barring Microsoft from using the Ticketmaster name on the Seattle Sidewalk site, as well as unspecified damages and fees.

The suit also claims that Microsoft is using Ticketmaster content, without the company's permission, to generate advertising revenue on the Sidewalk site.

"By accessing Ticketmaster's live event information and services without Ticketmaster's approval, and by prominently offering it as a service to their users, Microsoft is feathering its own nest at Ticketmaster's expense," the company said in its lawsuit. "It is, in effect, committing electronic piracy."

In a statement issued today, Fredric D. Rosen, Ticketmaster's CEO said, "This is a blatant case of electronic piracy by a supremely arrogant company that does not recognize the intellectual property rights of anyone else. This predatory behavior should be a wake-up call for content providers everywhere who are now at risk in the emerging world of electronic commerce."

The lawsuit was filed after the two companies broke off negotiations and Ticketmaster instead forged a deal with Microsoft rival CitySearch to provide online ticketing access and information about live events.

The general manager of Microsoft's Sidewalk effort, Frank Schott, said he has yet to see the Ticketmaster lawsuit. But he said Microsoft has no intent of changing its site or removing the links.

"We are not going to take the links down or pay for simple links. Linking is the essence of what the Web is about," Schott said. "This represents a fundamental attack on the Web itself."

Schott expressed puzzlement over the Ticketmaster suit, and said that Microsoft routinely turns down other sites that request links on the Sidewalk Web pages. "Hundreds of people come to us and beg us to put their links on our site. It's a little curious that [Ticketmaster] wants us to take the links down."

The Ticketmaster lawsuit also contends that Microsoft has published "erroneous and misleading" information about the type of payment the ticketing agency accepts. And the ticketing agency contends that Microsoft's use of the Ticketmaster name dilutes the commercial value of its site and marketing relationships.

Microsoft, which launched Seattle Sidewalk on April 3, will open similar sites in New York, Boston, and Minneapolis by the end of June, said Schott. Those sites will include the Ticketmaster links, as will future Sidewalk sites "We will absolutely put the Ticketmaster links on future sites," said Schott.

Schott reasoned that Microsoft's use of the links on its sites is no different than a newspaper publishing Ticketmaster's phone number. "Newspaper editors would not take kindly to the notion that they would have to get permission to use a phone number, or that they would have to share advertising revenues," with Ticketmaster, he said.

Schott added that Ticketmaster is the exclusive ticketing agency for many of the events listed by Seattle Sidewalk.

Microsoft plans to launch similar services in 10 to 15 more cities this year as part of an international rollout, betting that it can win a share of advertising revenue being generated in the hotly competitive market.

Listings of many events include information about Ticketmaster, such as its telephone number and hours, as well as links that take users directly to Ticketmaster's own Internet site.

Ticketmaster says its own sales have grown from about $100,000 last November to more than $2.5 million this month.

Ironically, Ticketmaster is mostly owned by Paul Allen, a cofounder of Microsoft who still owns a nine percent stake in the software company. Allen is also an investor in CNET: The Computer Network.

Reuters contributed to this report.